Loan Calculator
This loan calculator returns the fixed monthly payment for an amount borrowed at a given APR and term, plus the total interest you pay over the life of the loan.
Enter your figures below. Results update as you type.
Monthly payment$500.95
- Principal 83%
- Interest 17%
- Total of payments
- $30,056.92
- Total interest
- $5,056.92
- Number of payments
- 60
Total cost of the loan
| Amount borrowed | $25,000.00 | 83.2% |
|---|---|---|
| Total interest | $5,056.92 | 16.8% |
- Total of 60 payments
- $30,056.92
- Pay-off date
- Nov 2031
Monthly vs. bi-weekly payments
Monthly
$500.95Payment each month
Nov 2031Pay-off date
$5,056.92Total interest
Bi-weekly
$250.47Payment every two weeks
Jun 2031Pay-off date
$4,526.77Total interest
Bi-weekly saves $530.15 in interest and ends the loan 6 mo sooner.
- Balance
- Interest paid
- Total paid
How the Loan calculation works
Payment = P x i / (1 - (1 + i)^-n)
P is the amount borrowed, i is the monthly rate (APR divided by 12) and n is the number of payments. A longer term lowers the payment but raises the total interest: $25,000 at 7.5% costs about $5,057 in interest over 5 years and about $8,321 over 8.
How a fixed-rate loan works
With an installment loan you borrow a lump sum and repay it in equal monthly payments over a set term. Each payment covers that month's interest first, and the rest reduces the balance. Because the balance shrinks, the interest portion gets smaller every month and the principal portion gets larger, even though the payment itself never changes.
How the term changes the cost
Stretching a loan over more years lowers the payment and raises the total interest. For $25,000 at 7.5% APR:
| Term | Monthly payment | Total interest |
|---|---|---|
| 3 years | $777.66 | $2,996 |
| 4 years | $604.47 | $4,015 |
| 5 years | $500.95 | $5,057 |
| 6 years | $432.25 | $6,122 |
| 7 years | $383.46 | $7,210 |
Going from three years to seven halves the payment and more than doubles the interest.
How the rate changes the cost
Your rate depends mostly on your credit score and on whether the loan is secured. The same $25,000 over five years:
| APR | Monthly payment | Total interest |
|---|---|---|
| 6% | $483.32 | $3,999 |
| 9% | $518.96 | $6,138 |
| 12% | $556.11 | $8,367 |
| 18% | $634.84 | $13,090 |
| 24% | $719.20 | $18,152 |
Secured and unsecured loans
A secured loan is backed by something the lender can take if you stop paying, such as a car or a house. That lowers the lender's risk, so secured loans generally have lower rates. Unsecured loans, including most personal loans, rely only on your credit and income and are priced higher to match.
Interest rate and APR
The interest rate is the cost of borrowing the principal. The annual percentage rate (APR) also includes lender fees such as an origination charge, expressed as a yearly rate. Two loans with the same interest rate can have different APRs, and the APR is the one to compare. If you have been quoted only a monthly payment, the interest rate calculator works out the rate behind it.
Before you sign
- Check for an origination fee. It is often deducted from the amount you receive, so you may need to borrow slightly more.
- Ask whether there is a prepayment penalty. Most personal loans have none, which lets you pay extra without cost.
- Compare the total of payments, not just the monthly figure. A lower payment over a longer term usually costs more.
- See how extra payments would shorten the loan with the loan payoff calculator.
Frequently asked questions
What is the difference between interest rate and APR?
The interest rate is the cost of borrowing the principal. APR adds lender fees and expresses the total yearly cost, which makes it the better figure for comparing offers.
How do I find the rate on a loan I was quoted?
If you know the amount, payment and term, the interest rate calculator solves for the APR.
How do I calculate a loan payment?
Use Payment = P x i / (1 - (1 + i)^-n), where P is the amount borrowed, i is the APR divided by 12 and n is the number of months. $25,000 at 7.5% over 60 months works out to $500.95 a month.
How is interest on a loan calculated?
Each month the lender multiplies your remaining balance by the yearly rate divided by 12. On $25,000 at 7.5% the first month's interest is $156.25. Because the balance falls with every payment, so does the interest.
What is loan-to-value and how do I calculate it?
Loan-to-value (LTV) is the loan divided by the value of what it is secured on, as a percentage. A $320,000 mortgage on a $400,000 home is 80% LTV. Lower LTV usually means a better rate.
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